US governor releases report on VC Summer flaws

06 September 2017

Bechtel Corp highlighted "significant issues" at the VC Summer project 18 months before construction of two AP1000 reactors at the site in Fairfield County, South Carolina, was scrapped in July. Difficulties, such as flawed construction plans, faulty designs, inadequate management and low worker morale, were outlined in the engineering, construction and project management company's independent analysis of the project dated February 2016.

On 31 July, Scana Corporation subsidiary South Carolina Electric & Gas (SCG&E) announced its decision to cease construction of the two Westinghouse-designed units at VC Summer. The announcement followed co-owner Santee Cooper's decision to suspend construction because of projected completion delays and cost overruns.

Bechtel's report was released by South Carolina Governor Henry McMaster's office on 4 September against objections from Santee Cooper's lawyers, who asked the governor not to place it in the public domain.

Issues

According to Bechtel's project assessment report for VC Summer, there were eight significant issues facing the project:

• While the consortium's engineering, procurement and construction plans and schedules are integrated, the plans and schedules are not reflective of actual project circumstances;

• There is a lack of a planned vision, goals and accountability between the owners and the consortium;

• The contract does not appear to be serving the owners or the consortium particularly well;

• The detailed engineering design is not yet completed, which will subsequently affect the performance of procurement and construction;

• The issued design is often not constructible, resulting in a significant number of changes and causing delays;

• The oversight approach taken by the owners does not allow for real-time, appropriate cost and schedule mitigation;

• The relationship between the consortium partners (Westinghouse Electric Company (WEC)) and Chicago Bridge & Iron (CB&I)) is strained, caused to a large extent by commercial issues.

Recommendations

Bechtel's recommendations included creating a new "more achievable" project schedule.

The owners should develop an Owner's Project Management Organisation and supplement current owner staff with additional EPC-experienced personnel, it said. The owners and consortium should "align contract commercial conditions with the project goals and determine the realistic to-go forecast costs for project completion". The consortium should complete a "new, more achievable" project schedule. It should remove the "mandatory constraints" from the Integrated Project Schedule and allow the schedule to move "based on the logic". It should prioritise the development of mitigation/recovery plans based on their impact to the schedule, it said. It should also ensure appropriate time is allocated for the installation of bulk commodities (large and small bore piping, pipe supports, cable tray, conduit, cabling).

The consortium should "initiate a focused effort to complete WEC known engineering 'debt' and release the over 1000 drawing holds that exist"; intensify the efforts of the Strategic Planning group, work package planning, constructability reviews etc. to identify design changes needed well in advance of the construction need date; and stay on top of identifying and resolving emergent technical issues.

The consortium should also increase manual staffing levels to allow working of all available work areas, and evaluate methods "to have the craftsmen spend more time at the workface". It should implement actions "to improve craft productivity and retention, and simplify and streamline work packages", the report said.

In addition, Bechtel recommended that the consortium "complete the inventory revalidation effort and establish a program to continually validate the inventory". And it should "complete the procurement schedule adherence effort to ensure equipment delivery dates meet construction need dates".

Michael Bexley, senior vice president and general counsel at Santee Cooper, wrote to McMaster on 3 September, providing the Bechtel report as requested and asking that its contents remain confidential. McMaster's office said in a statement on 4 September the governor "believes there is no basis for their 'assertion of privilege' or confidentiality".

Westinghouse filed for Chapter 11 protection from creditors in late March to enable strategic restructuring amid "financial and construction challenges" in its US AP1000 power plant projects.

VC Summer is one of two projects to build Westinghouse AP1000 pressurised water reactors in the USA. The other is Georgia Power's Vogtle plant under construction near Waynesboro in Georgia.

On 31 August, Georgia Power filed a recommendation with the Georgia Public Service Commission to complete construction of Vogtle units 3 and 4 as the most economic choice for customers. The company expects unit 3 to begin commercial operation in November 2021 and unit 4 in November 2022.

Construction of all four US AP1000s - VC Summer and Vogtle - began in 2013.